|Expense Ratio (net)||0.15%|
|Last Cap Gain||0.00|
|Morningstar Risk Rating||Above Average|
|Beta (3Y Monthly)||1.03|
|5y Average Return||N/A|
|Average for Category||N/A|
|Inception Date||Dec 11, 1986|
For older investors considering which allocations to overweight and underweight in their retirement accounts, the advice most frequently given by financial advisers for years has been to favor the bonds. Recent research suggests that the best type of investment to overweight in a tax-advantaged retirement account is an actively managed REIT or small-cap equity fund. This isn’t surprising given that actively managed funds tend to feature more turnover of assets than other types of funds, which contributes to a greater tax bill.
Vanguard index funds have long been at the forefront of passive investing and are favorites among the buy-and-hold community for building long-term portfolios.
As with the other portfolios, I used Morningstar's Lifetime Allocation Indexes to guide the asset-class exposures for these Vanguard portfolios. To help populate the portfolios with specific funds and monitor them on an ongoing basis, I leaned on Morningstar's Medalist ratings and input from Morningstar's analyst team.
Because of their ultralow costs and broad diversification, various Vanguard funds featured heavily in my previous model bucket portfolios, both the original series as well as the ETF and tax-efficient series that came later. In part, that's because these portfolios are designed for tax-deferred accounts, so managing for tax efficiency--a big benefit of equity index funds and ETFs--is not valuable here.
E*TRADE is the only major online broker to offer Vanguard mutual funds within its no-load, no-transaction-fee program
The S&P 500 index fund is help up to be a great low-cost option for investors who want something simple. But investors need to diversify so what's a bond equivalent?